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2021 (12) TMI 306 - AT - Income TaxAddition made towards discount allowed to customers - Year of assessment - addition of discount pertains to sales made in earlier financial year on the ground that same partakes nature of prior period expenses - HELD THAT:- Assessee has allowed discount to customers on the basis of refund of special additional duty and such discount was agreed to be paid as and when assessee received refund of special additional duty from department. We further noted that the assessee has received refund of special additional duty during impugned assessment years which includes duty pertains to sales made in earlier financial year. As per contractual arrangement between the parties discount allowed to customers pertains to sales made in earlier financial year accrued for year under consideration when the assessee has received refund of special additional duty - discount allowed to customers on sales made in earlier financial year accrued for year under consideration and thus, same is deductible as and when the assessee has allowed to its customers. Since, the assessee has allowed discount to customers on the basis of refund of duty, and same has been received during impugned assessment year, the assessee has rightly claimed deduction for same in current financial year. The Assessing Officer without appreciating facts simply disallowed discount allowed to customers. CIT(A) without assigning any reasons has simply confirmed additions made by the Assessing Officer. Hence, we direct the Assessing Officer to delete addition made towards discount allowed to customers. -Decided in favour of assessee.
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